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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from_____________ to ________________

Commission file number: 001-38079

 

UROGEN PHARMA LTD.

(Exact Name of Registrant as Specified in its Charter)

 

 

Israel

98-1460746

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

499 Park Ave, New York, New York

10004

(Address of principal executive offices)

(Zip Code)

(646) 768-9780

Registrant’s telephone number, including area code

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of exchange on which registered

Ordinary Shares, par value NIS 0.01 per share

URGN

The Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of August 5, 2019, the registrant had 20,897,813 shares of ordinary shares, par value NIS 0.01 per share, outstanding.

 

 

 

 

 

 

 

 

 


 

UROGEN PHARMA, LTD.

INDEX

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Shareholders’ Equity

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4.

Controls and Procedures

28

PART II.

OTHER INFORMATION

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

71

Item 3.

Defaults Upon Senior Securities

71

Item 4.

Mine Safety Disclosures

71

Item 5.

Other Information

71

Item 6.

Exhibits

72

 

Signatures

73

 

Trademarks and Trade Names

Unless the context requires otherwise, references in this Quarterly Report to the “Company”, “we,” “us” and “our” refer to UroGen Pharma Ltd. and its subsidiary, Urogen Pharma, Inc.  The Company has trademarks for UroGen and RTGel. This Quarterly Report on Form 10-Q, or this Quarterly Report, contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

UROGEN PHARMA, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands, except share amounts)

 

 

 

June 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,424

 

 

$

101,318

 

Marketable securities

 

 

98,739

 

 

 

 

Restricted deposit

 

 

307

 

 

 

253

 

Prepaid expenses and other current assets

 

 

1,724

 

 

 

672

 

TOTAL CURRENT ASSETS

 

 

191,194

 

 

 

102,243

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

909

 

 

 

948

 

Restricted deposit

 

 

55

 

 

 

51

 

Marketable securities

 

 

43,851

 

 

 

 

Other non-current assets

 

 

2,557

 

 

 

317

 

TOTAL ASSETS

 

$

238,566

 

 

$

103,559

 

Liabilities and Shareholder's equity

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

7,071

 

 

$

8,540

 

Employee related accrued expenses

 

 

3,706

 

 

 

4,925

 

Other current liabilities

 

 

1,067

 

 

 

 

TOTAL CURRENT LIABILITIES

 

 

11,844

 

 

 

13,465

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Long-term lease liability

 

 

1,943

 

 

 

 

TOTAL NON-CURRENT LIABILITIES

 

 

1,943

 

 

 

 

TOTAL LIABILITIES

 

 

13,787

 

 

 

13,465

 

COMMITMENTS AND CONTINGENCIES (Note 14)

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Ordinary shares, NIS 0.01 par value; 100,000,000 shares

   authorized at June 30, 2019 and December 31, 2018; 20,849,515

   and 16,214,883 shares issued and outstanding as

   of June 30, 2019 and December 31, 2018, respectively

 

 

57

 

 

 

44

 

Additional paid-in capital

 

 

391,233

 

 

 

212,921

 

Accumulated deficit

 

 

(166,792

)

 

 

(122,871

)

Accumulated other comprehensive income

 

 

281

 

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

 

 

224,779

 

 

 

90,094

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

238,566

 

 

$

103,559

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

UROGEN PHARMA, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited; in thousands, except share and per share amounts)

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

REVENUES

 

$

18

 

 

$

364

 

 

$

18

 

 

$

845

 

COST OF REVENUES

 

$

 

 

 

318

 

 

 

 

 

 

748

 

GROSS PROFIT

 

 

18

 

 

 

46

 

 

 

18

 

 

 

97

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESEARCH AND DEVELOPMENT EXPENSES

 

$

9,996

 

 

 

8,273

 

 

 

19,722

 

 

 

15,895

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

$

13,775

 

 

 

10,207

 

 

 

26,482

 

 

 

16,276

 

OPERATING LOSS

 

 

(23,753

)

 

 

(18,434

)

 

 

(46,186

)

 

 

(32,074

)

INTEREST AND OTHER INCOME (EXPENSES),

   NET

 

$

1,276

 

 

 

408

 

 

 

2,265

 

 

 

766

 

REALIZED LOSS ON SALE OF SHORT-TERM

   INVESTMENT

 

$

 

 

 

 

 

 

 

 

 

(100

)

NET LOSS

 

$

(22,477

)

 

$

(18,026

)

 

$

(43,921

)

 

$

(31,408

)

NET LOSS PER ORDINARY SHARE BASIC AND

   DILUTED

 

$

(1.08

)

 

$

(1.14

)

 

$

(2.19

)

 

$

(2.02

)

WEIGHTED AVERAGE NUMBER OF SHARES

   OUTSTANDING USED IN COMPUTATION

   OF BASIC AND DILUTED LOSS PER

   ORDINARY SHARE

 

 

20,833,671

 

 

 

15,784,393

 

 

 

20,095,174

 

 

 

15,528,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENTS OF COMPREHENSIVE LOSS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(22,477

)

 

$

(18,026

)

 

$

(43,921

)

 

$

(31,408

)

OTHER COMPREHENSIVE INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNREALIZED GAIN ON MARKETABLE

   SECURITIES

 

$

281

 

 

 

 

 

 

281

 

 

 

 

COMPREHENSIVE LOSS

 

$

(22,196

)

 

$

(18,026

)

 

$

(43,640

)

 

$

(31,408

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


2


 

UROGEN PHARMA, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(unaudited; in thousands, except share amounts)

 

 

 

Ordinary Shares

 

 

Preferred Shares

 

 

Additional

paid-in

 

 

Accumulated

 

 

Other

comprehensive

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

Number of

 

 

 

 

 

 

capital

 

 

Deficit

 

 

income

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Amounts

 

BALANCE AS OF MARCH 31, 2019

 

 

20,758,348

 

 

$

56

 

 

 

 

 

$

 

 

$

383,850

 

 

$

(144,315

)

 

$

 

 

$

239,591

 

CHANGES DURING THE THREE

   MONTHS ENDED JUNE 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of options into ordinary shares

 

 

91,167

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

171

 

 

 

 

 

 

 

 

 

 

 

172

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,212

 

 

 

 

 

 

 

 

 

 

 

7,212

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

281

 

 

 

281

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,477

)

 

 

 

 

 

 

(22,477

)

BALANCE AS OF JUNE 30, 2019

 

 

20,849,515

 

 

$

57

 

 

 

 

 

$

 

 

$

391,233

 

 

$

(166,792

)

 

$

281

 

 

$

224,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AS OF MARCH 31, 2018

 

 

15,473,981

 

 

$

42

 

 

 

 

 

$

 

 

$

184,421

 

 

$

(60,596

)

 

$

 

 

$

123,867

 

CHANGES DURING THE THREE

   MONTHS ENDED JUNE 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of options into ordinary shares

 

 

379,305

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,709

 

 

 

 

 

 

 

 

 

 

 

7,709

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,026

)

 

 

 

 

 

 

(18,026

)

BALANCE AS OF JUNE 30, 2018

 

 

15,853,286

 

 

$

43

 

 

 

 

 

$

 

 

$

192,129

 

 

$

(78,622

)

 

$

 

 

$

113,550

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 

UROGEN PHARMA, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(unaudited; in thousands, except share amounts)

 

 

 

Ordinary Shares

 

 

Preferred Shares

 

 

Additional

paid-in

 

 

Accumulated

 

 

Other

comprehensive

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

Number of

 

 

 

 

 

 

capital

 

 

Deficit

 

 

income

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Amounts

 

BALANCE AS OF JANUARY 1, 2019

 

 

16,214,883

 

 

$

44

 

 

 

 

 

$

 

 

$

212,921

 

 

$

(122,871

)

 

$

 

 

$

90,094

 

CHANGES DURING THE SIX

   MONTHS ENDED JUNE 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of options into ordinary shares

 

 

427,315

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

2,217

 

 

 

 

 

 

 

 

 

 

 

2,219

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,659

 

 

 

 

 

 

 

 

 

 

 

14,659

 

Issuance of ordinary shares in public

   offering, net of issuance expenses

 

 

4,207,317

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

161,436

 

 

 

 

 

 

 

 

 

 

 

161,447

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

281

 

 

 

281

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(43,921

)

 

 

 

 

 

 

(43,921

)

BALANCE AS OF JUNE 30, 2019

 

 

20,849,515

 

 

$

57

 

 

 

 

 

$

 

 

$

391,233

 

 

$

(166,792

)

 

$

281

 

 

$

224,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AS OF JANUARY 1, 2018

 

 

13,751,390

 

 

$

37

 

 

 

 

 

$

 

 

$

115,692

 

 

$

(47,214

)

 

$

 

 

$

68,515

 

CHANGES DURING THE SIX

   MONTHS ENDED JUNE 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of options into ordinary shares

 

 

418,970

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,250

 

 

 

 

 

 

 

 

 

 

 

12,250

 

Issuance of ordinary shares in public

   offering, net of issuance expenses

 

 

1,682,926

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

64,188

 

 

 

 

 

 

 

 

 

 

 

64,193

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,408

)

 

 

 

 

 

 

(31,408

)

BALANCE AS OF JUNE 30, 2018

 

 

15,853,286

 

 

$

43

 

 

 

 

 

$

 

 

$

192,129

 

 

$

(78,622

)

 

$

 

 

$

113,550

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4


 

UROGEN PHARMA, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(unaudited; in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(43,921

)

 

$

(31,408

)

Adjustment to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

123

 

 

 

291

 

Amortization/Accretion on marketable securities

 

 

(167

)

 

 

 

Stock-based compensation

 

 

14,659

 

 

 

12,250

 

Exchange rate differences

 

 

 

 

 

1

 

Realized loss on sale of short-term investment

 

 

 

 

 

100

 

Right of use asset

 

 

491

 

 

 

 

Lease liability

 

 

(374

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Decrease in inventory

 

 

 

 

 

174

 

Increase in accounts receivable

 

 

 

 

 

(232

)

Increase in prepaid expenses and other current assets

 

 

(1,082

)

 

 

(66

)

(Decrease) increase in accounts payable and accrued expenses

 

 

(999

)

 

 

1,422

 

Decrease in deferred revenues

 

 

 

 

 

(564

)

(Decrease) increase in employee related accrued expenses

 

 

(1,219

)

 

 

261

 

Net cash used in operating activities

 

 

(32,489

)

 

 

(17,771

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Change in restricted deposit

 

 

(4

)

 

 

(51

)

Purchases of marketable securities

 

 

(142,142

)

 

 

35,901

 

Purchases of property and equipment

 

 

(84

)

 

 

(204

)

Net cash (used in) provided by investing activities

 

 

(142,230

)

 

 

35,646

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from exercise of options into ordinary shares

 

 

2,217

 

 

 

 

Issuance of ordinary shares, net of issuance expenses

 

 

161,662

 

 

 

64,235

 

Net cash provided by financing activities

 

 

163,879

 

 

 

64,235

 

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(10,840

)

 

 

82,110

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT

   BEGINNING OF THE YEAR

 

 

101,571

 

 

 

36,999

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT

   END OF THE YEAR

 

$

90,731

 

 

$

119,109

 

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING

   AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Exercise of options