Urogen Pharma Ltd (URGN) 2020 Q3 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to UroGen Pharma's Third Quarter 2020 Financial Results and Business Update Conference Call.

It is now my pleasure to turn the call over to Sara Sherman, Head of Investor Relations for UroGen Pharma. Please go ahead.

Thank you, Jonathan. Good morning, everyone, and welcome to UroGen Pharma's Third Quarter 2020 Financial Results and Business Update Conference Call. Earlier today, we issued a press release providing an overview of our recent corporate highlights and financial results for the quarter ended September 30, 2020. 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 Molly Henderson, Chief Financial Officer. Please note that we continue to conduct our calls from different locations, so we appreciate your patience and understanding should we have any technical difficulties.

On today's call, Liz will provide a summary of our recent corporate developments. Mark will share clinical development and regulatory updates, and Jeff will discuss our recent launch of Jelmyto and commercial updates. Molly will then provide an overview of our financial highlights for the third quarter before we open the call for questions.

As a reminder, during today's call, we'll be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of UroGen Pharma's quarterly report on Form 10-Q filed with the SEC this morning and other filings that UroGen Pharma makes with the SEC from time to time as well as any negative effects on UroGen's business and commercialization and product development plans caused by or associated with the COVID-19 pandemic, to the extent not disclosed previously. We encourage all investors to read the company's quarterly report on Form 10-Q and the company's other SEC filings. These documents are available under the SEC filings section of the Investors page of UroGen's website at investors.urogen.com. In addition, all information we provide on this conference call represents our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise.

And with that, I'll now turn the call over to Liz.

Thank you, Sara, and thank you all for joining us on our third quarter conference call. Since our last earnings call, UroGen has gained important traction in bringing Jelmyto to patients in need and has continued to execute on our near-term business objectives and growth strategies for the long term. We are encouraged by the positive progress we've made to date in our commercial launch of Jelmyto, which was officially launched on June 1, bringing the first of its kind therapy to patients with low-grade upper tract urothelial carcinoma.

In our first full quarter of launch, we have exceeded our internal expectations and reported $3.5 million in net product sales. I think this is a testament to the efforts of our commercial team as well as the positive reception we've received from physicians, despite the unprecedented environment we are continuing to operate in. Jeff will provide a more detailed update on our progress shortly, but we are excited about where we are and the outlook for this important medicine.

As we previously communicated, we submitted a label update with the final results from the pivotal Phase III OLYMPUS trial of Jelmyto, and we believe the FDA will approve the updated label for Jelmyto in early 2021. We expect the updated label to be similar to the current label, given the final results are consistent with previously shared results, and we anticipate presenting the final OLYMPUS data at a medical meeting by the end of this year.

We also continue to progress our uro-oncology pipeline. Our most advanced pipeline program is UGN-102 for the treatment of patients with low-grade intermediate risk non-muscle-invasive bladder cancer. We see important synergies in a way in which low-grade upper tract urothelial carcinoma and low-grade intermediate risk nonmuscle-invasive bladder cancer present, as well as the way in which our novel technology may provide a solution and a new way of treating these diseases in vulnerable populations.

The type of bladder cancer we're focusing on with UGN-102 is very difficult to treat, and there are no drugs currently approved by the FDA for this indication. It is characterized by high rates of recurrence and the need for repetitive surgical intervention. The addressable patient population is approximately 80,000 patients annually in the U.S. alone. This includes newly diagnosed patients and patients who have a recurrence after surgery. We believe UGN-102 has the potential to provide a durable nonsurgical treatment alternative to this patient population.

On our last call, we provided update durability estimate from our Phase IIb OPTIMA II trial of UGN-102, and we remain on track to share final data by year-end. We also remain committed to initiating our pivotal Phase III clinical study by the end of this year. It's exciting for us to be able to demonstrate the potential of our novel technology in upper tract urothelial carcinoma with Jelmyto and in low-grade intermediate risk non-muscle-invasive bladder cancer expected with 102.

As we look beyond low-grade disease, we have an exciting earlier-stage pipeline program, UGN-302, a combination of UGN-201, our TLR7/8 agonist; and UGN-301, the anti-CTLA-4 antibody that we licensed from Agenus to be combined with our gel technology. We are initially studying UGN-302 in high-grade nonmuscle-invasive bladder cancer and believe it has the potential to change the treatment paradigm for this hard-to-treat disease. Phase I studies are expected to start in the first half of 2021.

I want to now take a moment to introduce 3 new members of our executive team that joined us this past quarter. Molly Henderson, our new Chief Financial Officer, who you will be hearing from in a few minutes, has over 15 years of experience as a public company, life science CFO and joins us from Advaxis, a clinical-stage biotechnology company focused on the development and commercialization of immunotherapy products, where she served as Executive Vice President and Chief Financial Officer.

Jason Smith has been named General Counsel and Chief Compliance Officer and joins us from Pfizer where he spent the last 11 years. Jason joined Pfizer as Chief Counsel for Vaccines and was most recently Chief Counsel, Oncology. And last, but not least, Polly Murphy has been named Chief Business Officer and joins us from Pfizer where she most recently served as the Vice President of Early Commercial Development in the oncology business unit. These 3 executives bring a breadth of experience, which will support the acceleration of our pipeline development, our RTGel platform expansion and access to external innovation as well as great financial performance.

Although the BOTOX study did not meet the primary endpoint, we learned a great deal regarding our proprietary RTGel technology that helps inform how we can best develop important new medicines through the use of this technology. We continue to actively explore business development opportunities with and without the use of RTGel, and we are building academic collaborations that fit within our mission of improving the lives of patients with urologic diseases and specialty cancers. In addition to platform expansion, we continue to investigate the potential geographic expansion of Jelmyto and our pipeline.

Reflecting on the progress we've made, I believe the company is uniquely positioned with a strong management team, our first approved therapy and a pipeline that could potentially change the way these cancers are treated. We remain unwavering in our commitment to develop new approaches and treatment options for patients as we build a long-term sustainable growth business. We are confident that our current portfolio will provide us with a strong foundation on which to grow our organization and build a leading uro-oncology company.

With that, I'll turn the call over to Mark to discuss our recent clinical update. Mark?

Thank you, Liz. This is certainly an exciting time for UroGen with increased uptake of Jelmyto across the urologic community as well as key advancements in our programs. As a practicing urologist, I have seen firsthand the impact that Jelmyto is having as my colleagues begin to prescribe this new therapy for their adult patients with low-grade upper tract urothelial cancer.

As we look to our pipeline beyond Jelmyto, we continue to follow the Phase IIb OPTIMA II trial of UGN-102 and anticipate final data by the end of the year. In August, we communicated estimated durability of 72.4% based on interim data. In the study, patients are followed with durability up to 12 months post-treatment initiation.

Regarding the time line for ATLAS, which is our UGN-102 pivotal Phase III trial, we have finalized the design of the study with the FDA and remain on track to initiate the study by year-end. Site identification is well underway in the United States, Europe and Israel for this important global study. As a reminder, ATLAS will be a randomized controlled trial in approximately 600 patients, assessing UGN-102 with or without transurethral resection of bladder tumor, or TURBT, versus TURBT alone in patients with low-grade nonmuscle-invasive bladder cancer at intermediate risk for recurrence. The study is designed to evaluate UGN-102 versus standard of care, and patients will be randomized 1:1 to either UGN-102 or TURBT.

At the 3-month time point, patients will be assessed for response. Patients who have demonstrated a complete response to either UGN-102 or TURBT will continue for long-term follow-up for evidence of recurrence. Patients who demonstrate a recurrence in either arm will undergo TURBT and then will also continue for long-term follow-up for evidence of recurrence. The primary endpoint of the study is disease-free survival or recurrence-free survival in this disease. The trial is a time-to-event analysis and is designed to evaluate noninferiority first and then superiority. We expect the trial to take approximately 1 year to enroll and to be completed within approximately 3 years. The trial will also have interim analyses embedded throughout.

It is important to emphasize that UGN-102 is designed to be primary therapy, not adjuvant therapy, providing a potential alternative to surgery. To that point, today these patients are managed by repeated transurethral procedures under general anesthesia to treat this disease. And we have seen recently published literature from a Danish national cohort study that this practice appears to be associated with an increased risk of overall death. It's also important to note that in the Danish study, patients with a greater number of procedures had a greater risk of death than patients who had received only one procedure.

We believe that the ATLAS trial design will allow us to effectively demonstrate UGN-102's potential to change the treatment paradigm and offer an alternative treatment to surgical intervention and all of the potential comorbidities and complications that come from repeated surgeries in this patient population. We look forward to providing updates on the initiation of ATLAS in the near future.

One of our most exciting pipeline programs is UGN-302. This is an immuno-oncology program, which we are initially developing for patients with high-grade non-muscle-invasive bladder cancer. UGN-302 is a combination of UGN-201, our TLR7/8 agonist; and UGN-301, or zalifrelimab, an anti-CTLA-4 antibody that we have combined with our gel technology.

High-grade disease is very different biologically and clinically from the low-grade upper tract urothelial cancer and intermediate risk non-muscle-invasive bladder cancer populations that we have focused on in our Jelmyto and UGN-102 programs, respectively. High-grade non-muscle-invasive bladder cancer is an aggressive, potentially life-threatening malignancy characterized by both a significant risk of rapid recurrence and a genuine risk of disease progression to muscle-invasive cancer. The standard of care for patients with high-grade non-muscle-invasive bladder cancer is TURBT followed by intravesical immunotherapy with BCG, a mainstay of urologic practice now in short supply due to production challenges.

At best, this approach achieves a 50% recurrence-free survival rate, and patients who do not respond or who rapidly relapse following treatment are typically offered bladder removal as a means of achieving local cancer control. Bladder removal surgery is complex, life-changing and characterized by high rates of near- and long-term complications that range from sepsis and bowel obstruction to urinary incontinence and sexual dysfunction. There is clearly an unmet medical need to provide patients with high-grade non-muscle-invasive bladder cancer with an alternative to bladder removal, particularly in the face of the BCG shortage.

The UGN-302 program has produced encouraging nonclinical data, which suggests that the combination of UGN-201 and an anti-CTLA-4 antibody resulted in improved survival and decreased tumor size in our murine model. We also observed changes in immunological markers such as decreased T regulatory cells and a trend toward increased CD8/Treg ratios. We believe that combinatorial immunotherapy could be meaningful when applied locally, and that delivering the combination intravesically may negate systemic side effects and adverse events associated with systemic immunotherapy. We believe the data generated to date may represent an innovative approach to managing high-grade disease and look forward to advancing this program with a Phase I trial in the first half of 2021.

And with that, I would like to turn the call over to Jeff to provide a commercial update. Jeff?

Thank you, Mark. I'm pleased to be providing you with an update today on the progress of our commercial launch of Jelmyto, which has been underway since June 1. We've seen significant interest and growing demand for Jelmyto. As Liz mentioned, we have received positive feedback from physicians who have used Jelmyto, and we're hearing from these physicians on a daily basis. These early success stories and calls from physicians provide us a first-hand account of how we are making a difference in the lives of patients. These calls are often centered around how pleased physicians are that their patient was able to avoid surgery, and we're hearing from some physicians that their first patient achieved a complete response after finishing treatment. Jelmyto is definitely making an impact.

I would like to highlight a few points that help illustrate the success of the launch to date. As of November 1, we have increased our activated sites to over 165 sites, up from 100 sites at our last earnings call on August 10. These are sites who have either treated patients or are ready to treat patients. We expect this number to keep growing as our sales force of 48 reps continues to target hospital and community accounts where most of the patients are treated. And we are relentless in this effort. Just this past weekend, at the virtual Large Urology Group Practice Association Annual Meeting, we were the only partner who presented. This meeting alone provided us with the opportunity to engage approximately 500 physicians, nurses and business managers from large urology practices.

The other number that is important to mention is repeat accounts or accounts that have treated more than 1 patient, as it suggests the physicians are seeing clinical efficacy of the drug, the reimbursement is working and all the other components of the process have gone well. As of November 1, we have increased that number to 13 accounts, up from 2 accounts as of our last earnings call. This is a critical success factor, showing us that the processes and support in place are working and clinicians are identifying additional patients and gaining comfort in using this treatment.

I'd like to briefly provide some color on where these patients are being treated as it demonstrates another benefit of Jelmyto. About 40% of the patients are being treated in the hospital outpatient setting, about 40% in the surgery center and the remaining about 20% in the clinic. The number of patients treated in the clinic is slightly higher than we expected, likely driven by COVID, where there is a desire to avoid the hospital and more complex surgeries for UTUC. Much like we are adapting to a new way of living, working and utilizing technology, these physicians and patients are able to embrace a new way of treating this disease.

COVID has also impacted the type of patients who were the earlier adopters with Jelmyto. The majority of the patients being treated with Jelmyto to date are the recurrent patients, those who have experienced the challenges with surgery and now are embracing a new option. As more accounts begin to reopen, we've seen an uptick in the newly diagnosed patients or treatment-naive patients. We believe these newly diagnosed patients will be anxious to be treated. Therefore, we expect both recurrent and newly diagnosed patients to continue to increase and this mix to balance out in the coming months as more become familiar with the therapy.

As uptake continues, reimbursement also continues to go well. We've seen positive policies from commercial payers resulting in accurate and timely reimbursement for the clinicians. We believe that the payers understand the value proposition of Jelmyto and that this product can prevent or delay a major surgery or organ loss, which is obviously expensive but, more importantly, can present complications, especially for elderly patients.

As expected, beginning October 1, our unique C-code was put in place and will facilitate faster and accurate reimbursement in the surgery center and the hospital outpatient setting where Jelmyto is mostly used. While we expect more timely payment and a slight uptick with this code, we have had great success with the miscellaneous code, and the team has worked hard with accounts to make sure reimbursement goes smoothly. We continue to expect the permanent J-code in January, which will replace the C-code. While we don't expect a significant change in trajectory with the implementation of the J-code, it does eliminate a potential concern by some offices.

Before turning over to Molly, I would like to take a moment to acknowledge and commend the efforts of our team, our partners and the healthcare providers they've worked with through the course of the year to help ensure that patients in need of Jelmyto are able to get treatment. Although we continue to navigate uncharted territory with the current pandemic, our team has proven over and over again that they're up to the task of overcoming every challenge presented to them. And I believe that's a testament to the quality of people in our organization and their commitment to providing patients with our novel, effective and potentially kidney-sparing treatment option. We believe that the commercial infrastructure that our team has worked so diligently to establish over the course of this year will be invaluable for Jelmyto and potentially for the future success of UGN-102 and our earlier-stage pipeline programs.

And with that, I would like to turn the call over to Molly who will discuss our financials.

Thanks, Jeff, and hello to everyone on today's call. I'm delighted to have joined UroGen at such an exciting time and look forward to helping the company achieve its near and long-term financial objectives.

UroGen recorded net product sales of Jelmyto for the third quarter 2020 of approximately $3.5 million. Associated costs of revenues were approximately $309,000, including certain onetime start-up costs. In periods prior to receiving FDA approval of Jelmyto, and under accounting rules, we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expenses. We expect this to continue to have a favorable impact on cost of revenues through the first quarter of 2022 as we produce Jelmyto at costs reflecting the full cost of manufacturing and as we deplete inventories that we had expensed prior to receiving FDA approval. As a result, gross margins would have been 86.7% versus the reported 91.1% in the quarter ended September 30, 2020.

Research and development expenses for the third quarter and 9 months ended September 30, 2020, were $10.2 million and $34.9 million, respectively, compared to $9.5 million and $29.2 million for the same period in 2019. Research and development expenses also include $1.5 million and $5 million in noncash share-based compensation expense for the third quarter and 9 months ended September 30, 2020, as compared to $2.1 million and $6.4 million for the same period in 2019.

Selling and marketing expenses for the third quarter and 9 months ended September 30, 2020, were $11 million and $34.4 million, respectively, compared to $30.9 million and $9.7 million for the same periods in 2019. The increase in selling and marketing expenses resulted from increased costs and activities related to the commercial launch of Jelmyto in June 2020, including headcount and related costs associated with building our sales force. Selling and marketing expenses included $1.2 million and $3.5 million in noncash share-based compensation expenses for the third quarter and 9 months ended September 30, 2020, as compared to $617,000 and $1.6 million for the same periods in 2019.

General and administrative expenses for the third quarter and 9 months ended September 30, 2020, were $11.1 million and $33.7 million, respectively, as compared to $10 million and $30.8 million for the same periods in 2019. General and administrative expenses included $4 million and $12.9 million of noncash share-based compensation expense for the third quarter and 9 months ended September 30, 2020, as compared to $4.6 million and $13.9 million for the same periods in 2019.

For the third quarter and 9 months ended September 30, 2020, we reported a loss of $28.8 million or $1.31 per share, and $98 million or $4.52 per share, respectively. This compares to net losses of approximately $22.3 million or $1.06 per share, and $66.2 million or $3.25 per share for the same periods in 2019. The net loss for the third quarter and 9 months ended September 30, 2020, includes $6.8 million and $21.5 million, respectively, and noncash share-based compensation expense.

The company has provided an update to previously issued guidance for 2020. UroGen now expects 2020 total operating expense in the range of $138 million to $143 million, including noncash share-based compensation expense of $25 million to $29 million, subject to market conditions. Other nonoperating income for 2020 is anticipated to be approximately $2 million.

And lastly, we closed the third quarter of 2020 with approximately $126 million in cash, cash equivalents and marketable securities. UroGen continues to be well capitalized. And based on this cash position, we expect our current runway to bring us into 2022. We continue to assess our capital requirements as we look to advance our clinical development of UGN-102 as well as other clinical programs already in the pipeline for 2021 and for the long term.

With that, Jonathan, I would like to turn it back over to you for questions.

(Operator Instructions) Our first question comes from the line of Ram Selvaraju from H.C. Wainwright.

Most of these are regarding Jelmyto and the metrics that you have been providing regarding the launch. Firstly, I wanted to know whether you intend on providing these same types of metrics going forward or if that's potentially going to change as we get further and further into the launch. And secondly, I also wanted to ask about the kinetics with which you expect to see more and more centers administering more than one treatment. Is the fact that 13 centers have administered more than one treatment really a factor of when they came online, and you're seeing a steady increase in the number of centers that have administered more than one treatment? Or is that number of centers that have administered more than one treatment growing substantially at a slower rate than the total number of centers that have actually utilized Jelmyto once?

Ram, it's Liz. Thanks for the question. I'll just comment and then turn it over to Jeff, that what we'll be providing from a patient perspective is more -- is our revenue. We won't be providing patient-specific data or information on number of patients or number of patient forms, enrollment forms, but we should continue on the same -- the things that Jeff talked about this morning. So with that, I'll turn it over to Jeff to add some comments and answer your question more specifically. Jeff?

Sure. Thanks. Yes, so it's actually the first example you gave. We're seeing a steady increase in offices and accounts, finding another patient. I think we had 1 or 2 accounts that had 2 patients out of the gate. But for the most part, you'll see 1 patient. You'll see the training take place. You'll see, hopefully, a CR, and then you -- they go comb through their electronic medical records and find another patient that could benefit from Jelmyto. So it's a steady increase in accounts that have treated more than 1 patient.

And then relative to the J-code, did you already start to see a change in the ease of uptake for Jelmyto in the wake of the receipt of the C-code? Or do you expect the bulk of the impact to occur when you have the J-code as well? And then the last question I have is relating to the pipeline program, the Phase I combination of 201 with zalifrelimab. Can you give us a sense maybe of what you're looking to see from a drug activity standpoint with this combo regimen, what you would consider potentially promising indications of therapeutic activity within the context of the Phase I study?

So Jeff, why don't you take that first part? And then Mark, can you answer the question around our combination drugs?

Sure. So we did see a slight uptick. I always talk about slight because I really -- I don't think it's going to have a major impact once we have the C-code. And I was correct. We did have some offices that certainly appreciate having the C-code specific to Jelmyto and that they may have moved forward with the patient. I expect the same with the J-code. The J-code will replace the C-code once it's out. I'm sure there are some offices that have a little bit of anxiety around the miscellaneous code, but I don't -- I never talk -- I always talk about it being a slight uptick in patients, and I would think that would apply here. Mark?

Yes. Ram, thanks for the question. In reference to activity, we do know, for example, from previous work that there is anti-cancer activity when UGN-201 is applied intravesically as a solitary agent. But because of the nature of Phase I studies, which are largely directed at elucidating toxicity related to dose, I think it would be premature to provide very specific information about a therapeutic signal from that experience. Obviously, what we're looking for primarily is safety of the combination.

But to put this in context, I will refer you to recent data published about other agents used in this context. And I'm sure you're familiar with the fact that in this very hard-to-treat population, recurrence-free survival hovering in the range of 15% to 20% at a year is considered encouraging from a clinical perspective, so that should give you some sense long-term of what the current bar looks like. But obviously, we would be aspiring to something higher than that, although I can't comment further. And I don't know, Liz may want to provide additional comment about this as well.

No. No additional comments. Thanks.

Our next question comes from the line of Derek Archila from Stifel.

Congrats on the progress here. Just a couple from us. So I guess of the 165 sites that have been activated, do you have a sense of how many UTUC patients are treated at these sites on average on an annual basis? So that's question number one. And then for Liz, maybe you could talk about the ex-U. S. opportunities for Jelmyto, and if you're looking for potential partnerships, and is this something we can get some color on in the next 12 months? And I have one follow-up.

Yes. I'll talk about ex U.S., and then Jeff can answer the question. We definitely are very engaged in both Europe and Japan. And we've got people that we have engaged with that are experts in those areas, people we know, we've worked with in the past. And so we absolutely are looking at 2 avenues, and Europe continuing to sort of engage with the regulatory agencies and then secondly, engage with the payers, the governments, to understand or try to help them understand the benefit of Jelmyto. And so we absolutely will have -- will know within the next 12 months. But it does take time, and it will be a few months before we're able to give you anything specific.

In addition, we're very engaged also with Japan, and we've gotten some initial feedback from them as to what we think they might want. And our next step is actually to have a meeting with them. So we've had some work done, and we think we know what would need to get done. And the next step there is to really have a meeting. So you're right, once we have that information and really know specifically about what it would take, then we may engage partners. And we have some that have been potentially interested in those geographies, so we would further engage in conversations once we really have a path and understand what the path forward is in those markets for Jelmyto. So with that, Jeff, do you want to answer the question?

Sure. With regards to the accounts, most of the accounts that have treated a patient or are ready to treat a patient are, obviously, your cancer referral center, such as MD Anderson, a Mayo, those referral centers as well as large community practices. So where we've seen an increase in number of patients are the larger community groups, the referral centers. It varies. As you know, Derek, it's an orphan drug, so the number of patients certainly varies. But if you're looking for a number they treat, anywhere between 8 and 12 patients a year. One or 2 physicians may treat the bulk of those or it could be a little bit more dispersed. You may have a handful of physicians that treat 2 or 3 a year. But those are the main -- as we expected, most of this is in the community, the large groups with their own surgery center, that's where we're seeing a lot of the patients.

Got it. And then maybe I'll throw one in to Mark here. I know it's early, but I was wondering if you've gotten any sense from physicians utilizing Jelmyto already, whether they would look to incorporate maintenance dosing beyond the initial set of installations.

I think that is the answer, that it's probably a little bit too early for us to know the answer to that. We do know that the urology community is very familiar with the concept of maintenance within the context of treating urothelial cancer. So it wouldn't be surprising to me if we learn more about that as more physicians treat more patients. But I can't answer it right now.

Our next question comes from the line of Leland Gershell from Oppenheimer.

Congratulations. My question actually has to do with any color you can provide on kind of trends of patients coming into their urologists in Q3 versus Q2, any way you could characterize kind of the resumption in office visits after what was probably a very dry Q2 into Q3 and how that may have impacted with regard to the bolus effects potentially on Jelmyto uptake.

Yes, I think I'll let Jeff comment on it. It's a fluid situation, right? It's been interesting to see some areas of the country open and those areas close; other areas that were closed, open. So I think it's really hard for us to know what the actual impact of COVID is. I think as you've heard Jeff and Mark both talk in the past, patients can't wait so long before getting in to get treated. So even in the Q2 into Q3 timeframe, we don't think that there was a huge delay. But Jeff, why don't you sort of give some color on what we're seeing in the marketplace, specifically around physician offices and hospitals seeing patients?

Sure. So we've seen a steady increase. So what I'll say is, depending on where you are in the country and how quickly things are opening up, is really dependent on just prioritizing those patients. So we know that the patients that suffer from this are only going to wait a month, 2 months at best. And so urology offices are beginning to open up, beginning to prioritize patients. But I wouldn't say there's any sort of -- I think you mentioned bolus. It's a steady increase. Our nurses continue to get access to all of the practices that need their assistance. Depending on where you are in the country, face-to-face has opened back up and, if not, we continue that virtual interaction with the physician and the physician office.

Great. That's very helpful. And then just a question to drill into kind of willingness to buy into Jelmyto with the buy-and-bill, let's say, after an initial purchase by a group practice. I mean do you see a trend where there may be some hesitation, and then one patient is treated and then, following positive reimbursement, you see multiple orders because that practice of several urologists is now comfortable with the buy-and-bill?

No, great question. So we do -- there are a handful of accounts that will treat a patient and are waiting for accurate timely reimbursement. But most are moving forward. They really do understand the value that Jelmyto is bringing. And though they may have a little, as I always say, undue anxiety around a miscellaneous code or now a C-code, they are moving forward in treating patients. But do we have a handful of accounts that probably have a patient or 2 waiting? Sure. And then once they get reimbursed accurately and timely, they'll move forward.

Our next question comes from the line of Eric Joseph from JPMorgan.

I guess I'm curious to know what you're seeing currently in terms of TURBT procedure rates and what, if any, impact there is from COVID-19 and to what extent does your expectation of 1-year enrollment for ATLAS, do you assume any sensitivity from the ongoing pandemic? I guess given that's also a global study, are you able to give the mix of regional enrollment along the way? And then I have a follow-up.

Yes, I'll just talk a little bit about what we've done to ensure that the COVID doesn't impact our enrollment. And what we did early on was to move toward Eastern Europe, frankly. And so we've -- already in the works and already have centers ready to go, and we increased the number of centers in the Eastern Europe area because they don't seem to be having the same issue with COVID, and we felt like they -- and their enrollment and the work that we did, that the team did early on to ensure that we got centers that could enroll, they've been very bullish about their ability to enroll the study. So we know that even if we -- there's some reduction in the U.S., that we can offset that with our European sites. So with that, Mark, do you just want to comment on TURBTs and what you're seeing in the hospital, obviously, since you're on the front lines?

Sure. It's a good question, and the answer is that at least in the U.S., and I suspect this is probably, as Liz points out, very similar in Europe, we're back to full swing because there was a backlog because of the delay related to the spring -- impact in the spring of the pandemic on elective surgery. So right now, it's a very busy time in most operating rooms. And I think patients who are getting this surgery, which as you know is often performed in a surgery center or a hospital with the expectation that patients would either go home after surgery or the following day, is getting done at a regular or maybe even slightly enhanced rate in order to catch up. So I don't think that there's going to be a problem enrolling patients in this trial based on that specific concern.

Okay. Good. That's helpful. And Liz, I'm wondering if you could -- if I could get you to elaborate a little bit on some of the learnings from the BOTOX formulation study that you've noted in your prepared remarks. I guess, what were some of the shortcomings? Were they seen on the efficacy or the safety side? And does the experience there change at all your thinking about sort of the threads of API that could be coformulated or delivered in that sense, if that's what we would like with RTGel?

Yes, I think it's a great question. And the reality of it is we are never going to know exactly what happened. The hypothesis that we have, and I think AbbVie agree, is that the BOTOX molecule was just not able to penetrate the urothelium. And we believe it's likely because of the size of the molecule. I don't know if you're familiar with the BOTOX molecule, but it's a very large, large molecule. So it's about 6x the size of example, the CTLA 4, that we're putting into RTGel. So that gives you an example, sort of an example of what we would be doing. So I think what we learned is that we're not likely to try another large, large molecule. So we think that most of the large molecules are more the size of our -- again, our own CTLA 4 when you can kind of look across molecules.

But other toxins, there are other toxins that -- and I think BOTOX is well known, have -- that there are -- the properties of BOTOX specifically are very different and sometimes challenging. Think about it from -- when the -- trying to use it topically where there are other toxins that are smaller. So I think the plan forward, and they are not -- as we talked about before, AbbVie was very clear that they wanted to keep our arrangement in place and our agreement in place. We were very willing, frankly, to get out of the agreement because we felt like that would give us more freedom to operate. But they believe in the gel, they were very happy with the way that it worked to deliver the BOTOX. And so they want to look at it with other toxins in their portfolio as well as potentially other products in their portfolio outside of toxins.

And so the kind of next steps for them is now that they are going through their integration, they're doing their prioritization and their strategy work, and once they come out of that, we'll know whether they are going to move forward with it or not. And if -- we have talked to them about us being more active in that partnership and if they choose not to, and then we would have the ability to go out and find another potential partner in this space. So we feel like we learned a lot. Mark hates it when I say that it was a failed study, so I try not to say that, but I say it because -- and the reason is because the RTGel delivered what it was supposed to, it delivered the BOTOX into the bladder. It had sustained release, disintegrated over time. It was voided appropriately. So it did what it was supposed to do. Unfortunately, the BOTOX just did not get into the urothelial.

Our next question comes from the line of Matt Kaplan from Ladenburg Thalmann.

All right, we'll move on to the next question. Our next question comes from the line of Paul Choi from Goldman Sachs.

This is Corinne Jenkins on for Paul. I was hoping you could talk a little bit about which factors you'd expect to play kind of a driving role in a potential inflection in sales in 2021 and beyond.

Yes, I think what we've said, and I think we still really believe this, is that you'll see a steady increase in scripts as you would a typical -- any other typical adoption curve. We don't think there's going to be, a, an inflection point. All of a sudden tomorrow -- and Jeff has mentioned this earlier, J-code comes and all of a sudden you see an inflection point. We think we'll see steady growth month-over-month and quarter-over-quarter, and that's what we would expect. And we have commented that we believe that you'll see sort of a normal traditional adoption curve that you would with the other oncology products. So Jeff, I don't know if you have anything to add to that.

No, that's exactly what we expect.

Okay. And then I was hoping you could talk a little bit more about the interim analyses that are built into the ATLAS study. Whether we should expect to get updates from those or how you're going to think about disclosures there?

Yes. Because of the -- because they are event-driven studies, we don't want to sort of hypothesize or project when they might happen. I think that you would -- you'll hear about them. You probably -- you'll only hear about them if we are in a situation where we would stop a study for efficacy. And so I think that's the way I would think about it. So I wouldn't expect there to be specifically any readout we might share with you, after an analysis, that it's continuing, but we wouldn't be providing any updates or projections as to when that might be.

Okay. That's helpful. And then last question for me. Just curious, is this quarter a pretty good proxy for cash burn over the next several quarters? Or how are you thinking about that?

I'm not sure what the question is. Obviously, revenue impacts that as well. But we do think that from a -- if you're talking about it from a spending perspective, obviously, I think it is a good proxy, but you have to think about the things that we have upcoming, i.e., our Phase III study.

(Operator Instructions) Our next question comes from the line of Roger Song from Jefferies.

Great. So maybe 2 from me. So the first one is just drill down a little bit on the Jelmyto kinetics. Maybe just can you comment -- Liz or Jeff, can you comment a little bit on the time from the account identification to the first Jelmyto use? And how did that compare to the time to the second prescription? And do you see some acceleration from the first use to the second prescription?

Yes, Jeff?

Yes. No, I think it really depends on if they have a patient eligible. Given the orphan drug of the disease, we've seen accounts treat -- to answer your first question, it usually takes 2 to 4 weeks depending on the institution, if they diagnose or the patient is recurrent, that's usually a standard time depending on, again, the sort of the bureaucracy that the institution may have to go through to get Jelmyto.

As far as the time-to-second patient, it's working with the nurse navigators and the accounts to identify these folks if they've been out there, they've recurred, they now have another treatment option. Other accounts, that may have been a couple of months. They treated someone in July. And it's just, again, a matter of finding these patients given the orphan drug nature and really working with the nurse, the folks that can look at the EMR, the medical records and see who might benefit from Jelmyto. So that second question, it varies. It can be within days of after treating a first patient or a couple of months.

Sorry, I was on mute. Can you hear me now?

Yes.

Great. Maybe my second question is for Mark. So can you comment a little bit on the statistical assumptions for ATLAS? How confident are you about this 600 patients sufficient to meet both superiority and inferiority end point? And we noticed you basically have 2 additional data points can support or change that assumption like the full Phase IIb data readouts, and I remember you say you will do some kind of retrospective chart review for the natural history, so just to comment a little bit on the statistical assumptions.

Sure. So we haven't shared the statistical model at a granular level. And I would imagine that we probably aren't going to do that today either. What I can tell you is that we, first of all, discussed all of this with the FDA and agreed upon both the design of the trial as well as the size. And the size of the trial is going to provide us with the power we need in order to demonstrate what we believe will be both noninferiority and superiority. The interim analyses, as Liz pointed out, are event-driven, so we don't know when they'll occur. And they are obviously designed in order to assess superiority. Noninferiority is a time point that would occur at the final analysis, whenever that occurs, of the data set.

So with respect to the databases we've been reviewing, some of the analyses actually are in the process of being submitted as abstracts and papers for public consumption and presentation. And I would anticipate that actually some of those presentations will be made later this year or early next year. Although we're waiting to hear about acceptance, so it's probably premature to talk about the actual data in those abstracts. So we do, however, have information from those projects that we're going to share. And just generically, I will tell you that the information we've gleaned from that -- those exercises is supportive of what we've used to design the trial.

And just to put a fine point on this, remember that in the hard-to-treat population we're focused on -- the intermediate risk low-grade group -- the standard of care, which is transurethral resection, produces recurrence-free survival at about 12 months in about 50% of patients. So that is sort of a general ballpark number to keep in mind when you start thinking about our trial and the context in which we're using UGN-102 to treat this group of patients. And remember that in the Phase II, the complete response rate was 65%. So I realize that's not a complete answer to your question, but that's probably about as much as I feel comfortable sharing right now.

No, that's very helpful, Mark. Okay, that's all my questions. Congrats again for the progress.

Thank you.

And we have a question from Matt Kaplan from Ladenburg Thalmann.

Just wanted to zero in a little bit on reimbursement and what you're seeing there, and have there been any issues of reimbursement that you've had to address along the way? And where are you with respect to that?

Jeff?

Sure. So as with anything, we've provided better dating to our providers because a miscellaneous code, as I've always said, it's a manual process, so it's a manual submission. Where we've seen issues, it's simply because the form wasn't filled out correctly originally. So they've had to resubmit. Certainly the carrier, the MAC carriers need to be educated, have been educated, but again because it's a manual process with the miscellaneous code. Now it is only a month in with the C-code. But yes, we have seen offices that have been reimbursed. And it's getting more timely now that we see it with a C-code. We'll keep -- obviously, those accounts that treated early in October utilized the C-code. And hopefully, we'll start to see some of those accurately reimbursed here shortly.

Okay. That's helpful. And then in terms of -- you mentioned a dramatic increase in the number of sites that can -- that are prepared to use Jelmyto. I guess now you're up to 165 sites. Can you help us think about kind of the rollout of additional sites and kind of the uptake at those sites and how we should think about that?

Sure. So I've always said we're going to call on around 4,000 to 5,000 urologists with a field force that's anywhere between 1,300 to 1,500 accounts. My expectation is, obviously, as things open up, as physicians get more use, that that number is always going to be increasing. We -- obviously, we're targeting the key accounts in the community as well as the hospital. Those that have come up and running sooner as opposed to others are maybe quicker to start seeing patients, depending on where you are in the country. But yes, I'm happy to see that significant growth. I would expect to see that throughout 2021. That's going to be key because it is important. Not -- 1 or 2 accounts aren't going to have a handful of patients. We need to make sure and we're structured to get to all those accounts to make sure that every physician is aware of Jelmyto as an option for their patients with low-grade UTUC.

Congrats on the progress.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Liz Barrett for any further remarks.

Great. Thank you. Thank you, operator. As we've sort of demonstrated and shared with you, we've made some important progress as a company in 2020. We're very excited about the results that we shared for Q3. We look forward to our continued positive momentum throughout the remainder of this year. And then I mean we've really successfully transitioned to a commercial-stage organization, and our underlying fundamentals of our business are really strong. So our team continues to work relentlessly to make sure that we can provide Jelmyto to all patients and practitioners in need, and we're pleased with the progress on 102 and our early pipeline. So as we start to turn our view on to 2021, it's shaping up to be another busy year for us, and we look forward to providing you further updates. So thanks as always for your continued interest in our company. And, operator, you may now disconnect. Everybody, have a great week.

Thank you. And thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.