Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the UroGen Pharma Fourth Quarter and Year-end 2017 Financial Results Conference Call. [Operator Instructions]. It is now my pleasure to turn the call over to Cate Bechtold, Director of Corporate Communications and Investor Relations for Urogen Pharma. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to the UroGen Pharma Fourth Quarter and Year-end 2017 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 and full year ended December 31, 2017. The press release can be accessed on the Investors portion of the company's website at investors.urogen.com. Joining me on the call today are Ron Bentsur, Chief Executive Officer; Dr. Mark Schoenberg, Chief Medical Officer; and Gary Titus, Chief Financial Officer. Ron will provide a brief summary of our recent Corporate Development, and Mark will share clinical development and regulatory updates. Gary will then provide a brief overview of our financial highlights for the fourth quarter and full year 2017 before we open up the call for questions. As a reminder, during today's call, we will 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 the final prospectus for Urogen Pharma's follow-on offering of securities in the United States filed with the SEC on January 22, 2018, and other filings that Urogen Pharma makes with the SEC from time to time. We encourage all investors to read the company's final prospectus 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, except as required by law. I will now turn the call over to Ron.

Thank you, Cate. Good morning, everyone, and thank you for joining us on our conference call. 2017 marked a turning point for Urogen. It wasn't just a year of transformation as a result of our initial public offering. It was the year that marked the initiation of our pivotal Phase III OLYMPUS trial with our lead product candidate MitoGel for the treatment of low-grade upper tract urothelial carcinoma, or UTUC, an indication for which there are no approved drugs. If approved by the FDA, MitoGel will become the first drug ever approved for this indication. As a reminder, this is an indication where the prognosis for many of the patients is not favorable often requiring the removal of the kidney together with the removal of the upper tract as a result of the tumors being unresectable. Even though this type of major surgery is an undesirable outcome, it remains the default standard of care for many patients with UTUC. I would like to update everyone on the most recent development from our ongoing dialogue with the FDA regarding MitoGel. Pursuant to recent discussions with the agency, we are planning to present an interim analysis from our OLYMPUS trial at an upcoming medical meeting. As a reminder, OLYMPUS is our open-label, single-arm, pivotal Phase III trial of MitoGel for the treatment of low-grade UTUC, which is enrolling patients in clinical sites across the United States and Israel. Patients in the trial undergo 6 weekly catheter installation treatments of MitoGel. The primary efficacy endpoint is complete response, or CR, evaluated approximately 4 weeks after the last installation. We then follow-up with patients who achieve a CR for durability of response and will continue to treat those patients with MitoGel for up to 12 months of maintenance therapy. Further, we expect to report…

Thank you, Ron. It's a pleasure to be on this call today, especially as we enter a very exciting time in the clinical development. One of the items we are most excited about is the progress we're making with MitoGel as a potential new treatment for UTUC, which has an annual incidence in the United States alone of up to 7,500 cases. Included in this group of patients is approximately 3,000 new cases of low-grade UTUC diagnosed each year in this country. And since this is considered a chronic disease, the prevalence of UTUC in this particular group is 15,000 patients suffering from chronic burden of care. The anatomy of the upper tract is complex, which often makes it difficult and sometimes impossible to surgically remove the existing tumors. And as a result, patients, whose tumors cannot be endoscopically treated, may require removal of the kidney and ureter, referred to as a nephroureterectomy, to control the disease process. Nephroureterectomy involves the risks and complications of major surgery and the long-term consequences of decreased renal function in this typically elderly patient population. This is a very undesirable outcome for the patient. But unfortunately, it remains the default standard in cases where tumor location or tumor volume make conservative management untenable. There are no drug therapies currently approved for the treatment of low-grade UTUC. MitoGel has the potential to limit the need for repetitive surgical treatment and importantly the possible need for kidney and upper tract removal for patients with unresectable tumors. As Ron mentioned previously, an important recent development from our ongoing dialogue with the FDA, is that we will now be presenting an interim analysis from the OLYMPUS trial at an upcoming medical meeting. We're excited about this opportunity to share data from the trial with you sooner than previously…

Thank you, Mark, and good morning to all of you on today's call. Urogen is in a strong financial position and is well capitalized to further advance our clinical development programs and support our commercial planning efforts in preparation for potential U.S. approval of MitoGel in 2019. We ended 2017 with $73 million in cash, cash equivalents and short-term investments. We are pleased to have recently completed an upsized public offering of shares of our common stock in January 2018, with net proceeds of approximately $64 million. We believe our December 31, 2017, pro forma cash, cash equivalents and short-term investments position of approximately $137 million provides us with the financial runway necessary to execute our business plan. For the fourth quarter and fiscal year 2017, we reported net losses of $10.1 million or $0.74 per basic and diluted share. And $20 million or $2.14 per basic and diluted share, respectively, as compared to net income of $12.9 million or $5.17 per share basic and $1.56 per share diluted and a net loss of $1.9 million or $1.91 per basic and diluted share for the same periods in 2016. As a reminder, we recognized as revenue a $17.5 million upfront payment in fiscal year 2016 and a $7.5 million milestone in fiscal year 2017 from Allergan. Research and development expenses net were $6.8 million and $18.7 million for the fourth quarter and fiscal year 2017 as compared to $2.4 million and $10.3 million, respectively, for the same periods in 2016. Research and development expenses included $1.4 million and $3.9 million of noncash, stock-based compensation expenses for the fourth quarter and fiscal year 2017. The increase from 2016 to 2017, reflects an increase in personnel costs, an increase in share-based compensation and an increase in direct cost associated with the MitoGel Phase III clinical trial. General and administrative expenses were $3.4 million and $8.8 million for the fourth quarter and fiscal year 2017 as compared to $1.2 million and $6.4 million for the same periods in 2016. General and administrative expenses included $0.9 million and $2.4 million for noncash, stock-based compensation expenses for the fourth quarter and fiscal year 2017. At December 31, 2017, we had approximately $13.8 million ordinary shares outstanding. With that, operator, I would now like to turn the call over for questions.

[Operator Instructions]. And our first question comes from Jonathan Aschoff from National Securities.

I was wondering if you could elaborate on what the Compassionate Use program results mean as we look to both the interim analysis and the top line data.

Sure. I'll ask Dr. Schoenberg to address the question. Thanks, Jonathan.

Yes. It's an important question, and thank you for asking. What we believe the Compassionate Use program shows us is that in -- as described, highly adverse population of patients with upper tract disease, the therapeutic approach used using MitoGel is efficacious in the sense that, in a very limited population, we saw responses and most importantly, complete responses in patients who otherwise were candidates for kidney removal. So it's a surprising and impressive clinical response that now needs to be validated in our ongoing clinical trial. So we consider it an important signal, and it has what -- it's what prompted us to do the clinical trial that we are now in the midst of.

Can we assume that all, but the four disease-free patients have had their kidney resection? Or is that incorrect?

That would be incorrect actually. And remember, because of the nature of the Compassionate program, which is not really a formal clinical trial, the management of these patients is very much left to the discretion of the treating physician. So to our knowledge, based on our currently available follow-up, the patients who are considered disease-free have retained their kidneys.

Okay, but you don't know about the other beyond those four?

You're talking about the other four of the complete responders? The remaining complete responders?

No, I'm talking about the four who are not disease-free. Have any of -- have all of those had their kidneys...

I think the answer to that is, at least in one case we know that, that was not the case. However, we don't have complete follow-up answer to that question. And I'm sorry, I can't answer it for you today.

Okay. Then the last two quick ones is will this upcoming medical meeting remain a mystery? And by third quarter '18, are you trying to buy yourself a month or more like the whole quarter?

No, it's just because of the embargo rules right now we can't disclose the target conference and the timing. But certainly, we hope to buy ourselves more than a month. But soon enough, everyone will find out hopefully what conference it is and when it's going to happen. But right now, we're just embargoed.

And next we have Boris Peaker from Cowen.

So I just want to probe a little further on the OLYMPUS trial. You mentioned, obviously, the interim update. Can you comment how many patients worth of data do you anticipate in the update? And more importantly, maybe broadly, what would you anticipate an overall positive outcome to be from the OLYMPUS trial at the end?

Yes. So again, without getting into too much detail because of all the embargo rules, we, on the last conference call -- on the last quarterly call that we had, we stated that we were about halfway enrolled. So hopefully you can extrapolate and figure out roughly how many patients are going to be described in this interim analysis. Regarding what we would consider a success, so obviously the regulatory bar we believe is around 20%. And if you look at the Compassionate Use program, the intent to treat CR rate was 44%. And I think at the end of the day, if we're anywhere near than in the neighborhood of the 44%, the intent to treat complete response rate that we saw in the Compassionate Use program, I think that would be a very nice result. Keep in mind that in the Compassionate program, on one hand, we had sicker patients on average. On the other hand, it wasn't a tightly controlled Phase III study. So net-net, if we're anywhere in that neighborhood, I think we're going to be extremely pleased. And certainly, if we're higher than that, I think that would be a home run.

Great. And also my last question is, can you discuss maybe the Phase II design for VesiGel in the low-grade bladder cancer? I mean, you mentioned that the trial will start in a few months. But I'm just curious how many patients would it enroll? And also kind of a ballpark estimate for the timeline, either completion of enrollment or final data readout.

Yes. So the trial will be a single-arm, open-label study looking at the what we call the high recurring patients. These are patients that typically undergo, on average, more than 2 TURBT procedures per year, which means that this procedure is not very effective for these patients. And we plan to start the study in a few months. As Mark alluded to, we plan to file the IND for VesiGel in the second quarter and start the study as soon as practicable thereafter. And the trial will be somewhere in the vicinity of 60 to 70 patients, and we expect to have final results sometime in 2019. But keep in mind that this is a Phase IIb open-label, single-arm study so we could present data at important medical conferences periodically throughout the process.

And next we have Matthew Andrews from Jefferies.

This is Roger for Matt. So the first question -- for the first question, so has the enrollment pickup for OLYMPUS study after the slow December you mentioned earlier?

Yes, so we're not giving specifics on enrollment today. But if you back into -- try to extrapolate the numbers based on what we've disclosed on the call today, which is top line data in the third quarter, we have had an uptick in enrollment. And things are progressing according to those expectations. But we're not getting into any specifics on the call today.

Sure, I understand. So for the interim analysis, will you include CR readouts if at all? And for the top line result in Q3, will that be an ITT analysis in all 74 patients? And will that be the complete remission or the complete remission plus durability of remission?

Yes. So for the interim analysis, we will provide a complete response rate on the amount of patients that will be included in that analysis. So it will -- in effect, it will be an interim analysis based on an intent to treat for a subset of the patients that were the early enrolled patients. For the top line release in the third quarter, we will have the primary endpoint result, which means the intent to treat complete response rate on all the patients, including the durability information that we will have at that time point. Keep in mind that we will not have all the durability at the time of top line result. And those data, as it matures, will be provided to the FDA periodically throughout the NDA filing process and, obviously, afterwards during the review process as well.

Great, very helpful. My last question, that's for Gary. So considering recent tax legislation and Urogen has the operation in Israel, so what will be the kind of best assumption for tax rate?

So as you know, we're currently not in a tax position for the company, primarily because we're in the development stage. But we do have some tax issues for the U.S., minor ones, but they are there. Essentially what we foresee is the U.S. and Israel being on a very level platform from a tax basis. So Israel is at 23% currently. The U.S. will likely end up being very close to that. So like most companies, we're going to see a benefit in the long run from the Trump actions around taxes in the U.S. So that's our projections right now. We hope to be tax -- have tax issues in the near for term. Currently, that's not our biggest issue.

Next we have Matt Kaplan from Ladenburg Thalmann.

Just wanted to dig in a little bit more into the interim analysis in terms of what you can share at this point. You detailed, I guess, the expectations to the CR rate looking at what you saw in Compassionate Use and the regulatory bar for it. But are we -- could we expect any durability data on the interim or would it be too soon?

There'll be some durability information, but not a lot. Keep in mind that we started enrolling patients in the April, May timeframe of 2017. That's when the study started. So there's not going to be a lot of durability information, won't be much. Obviously, for the top line release in the third quarter, there will be much more.

Great. And then in terms of how should we think about the -- where MitoGel will fit into the continuum of care assuming you show something that was similar to the Compassionate Use CR rate? Maybe more of a question for Mark.

Matt, thanks. It's a great question. So primarily, we would anticipate that the product would be used in patients with the lesions we're studying in the clinical trial, namely, new and recurrent low-grade UTUC. However, because urologists will likely use this in variety of clinical settings, there will also be the opportunity to use it repetitively because patients -- some patients will continue to recur throughout their lives. So repeat induction therapy is anticipated. And in addition, there's a likelihood that urologists will use this as they often do use their surgical armamentarium as an integrated component in the care of these patients. So with surgery, before and after surgery in the integrated care of the individual patient. So I imagine that actually what we will see in clinical practice will be a variety of uses not just what we're seeing or what we're anticipating based on the results of the clinical trial.

Okay, that's helpful. And just shift gears to VesiGel. You're talking about the Phase IIb in NMIBC. What are your thoughts on patients that are intolerant to anesthesia and a potential study there?

Yes, Mark, yes, go ahead.

Well, there certainly are patients who are high risk for anesthesia, who have confounding comorbidities that make the typical surgical procedure very, very unattractive. And some of these would be considered things like morbid obesity, predisposition to bleeding, for example. So these patients certainly would be considered potential participants in the trial we're envisioning. But again, because they don't represent a very, very large group of people, at least in our current estimate, we would also want to focus on what we believe is a larger group of patients that was not namely with chronically relapsing disease, who represent a real urologic problem because they effectively represent people who have failed surgical management. So we think there's probably a continuum of the target population for this product, including patients who are anesthesia high risk or intolerant as well as those with specific disease characteristics that make them difficult to deal with from a surgical perspective.

Okay, great. And then kind of a broader overview in terms of -- and you touched on this a little bit in your prepared remarks. But the potential utility of the RTGel technology outside of its current applications, where -- I don't know if you want to share, but where do you think you could go next in terms of the use of the technology?

Yes. So that's a very good question because obviously we believe that the platform could have utility beyond what we're doing today. So first case in point is the Allergan collaboration. I think that's potentially one such use. So the BotuGel program targets overactive bladder, which is the clinical trial, the Phase II trial that Allergan is conducting right now. So if that is successful, I think that would be the first true validation of potential use outside of uro-oncology. But beyond just urology, we believe that this could have utility, as we said on -- in the prepared remarks, in several cavities where you need to overcome some sort of physiological challenge and where dwell time is important so things like the GI, women's health, possibly even colorectal, things of that nature. These are all things that we're thinking about very carefully and, in, fact, we've started some early preclinical work along some of these avenues. So stay tuned and hopefully we'll have more to discuss later this year or maybe in early 2019, but these things are already underway.

Next we have Derek Archila from Oppenheimer.

I just have 1. Given the recent financing, I just wanted to get your thoughts kind of on potential business development activity and what types of assets you can consider bringing into the fold and expand the development portfolio here?

Sure. So we want to take an opportunistic approach without doing things that are too many degrees of separation from what we're doing. So things that could make sense would be obviously things in uro-oncology, things in urology, and maybe even one step further than that. It's a focus of ours right now. It's not the main focus. The main focus obviously is to drive the pipeline with MitoGel being the most important program that we're running currently. But it is something that we're thinking about. We have -- I think, we've got a very strong infrastructure within the company to conduct clinical trials and to generate value. So obviously it is something that we're starting to think about in terms of being able to identify additional assets that we can bring in and try to elevate to higher plateaus in terms of value. But we want to stay focused. And ideally, we're not going to do things that are too far away from our core competency, which is uro-oncology and urology.

And next we have Ren Benjamin from Raymond James.

Can you talk maybe just provide a little bit more color regarding the interim analysis discussions that you had with the FDA? Was this something that you brought up to them, they brought up to you? Do you have the potential to modify the ongoing OLYMPUS study based on these interim analyses? Maybe just some additional color there.

Yes, obviously, I need to refrain from shedding too much color on the play-by-play of the discussions. But these were standard discussions as we're gearing up towards the NDA filing in anticipation of pre-NDA meetings and things of that nature. And it just came up in one of the topics that was discussed whether it was possible to conduct an interim analysis because it has been a subject that's been talked about quite extensively by investors, analysts and so on. A lot of people have been asking us, whether we would be eligible or able to conduct some sort of an interim analysis at an important medical conference and so on. So it just came up in one of the discussions with the FDA, and the FDA was very amendable to that. So we basically decided to do it.

And then in terms of -- based on that data, are there changes that you could potentially employ? And I guess maybe even more importantly, based on -- I mean, if it's very good data, could you accelerate the entire program and potentially not even go to complete enrollment?

I mean, it's obviously pretty mature to discuss any of those things. That was not part of the discussion with the FDA. It was merely the topic of the interim analysis. And obviously, we hope to have a strong showing in this interim analysis. And whatever follow-up discussions we have with the FDA, depending on the data and so on, will probably happen afterwards.

Got it. And maybe just switching gears to the Compassionate Use study. You had mentioned the four patients who didn't maintain their CR. Have you done any sort of analyses on those patients? And are there any learnings in type -- in terms of those patient characteristics that you might be able to apply from a clinical trial perspective or even a marketing perspective?

Yes, it's a great question and it's actually very much in sync with where the field is going from a research point of view as well because everybody is focused on urothelial cancers looking for biomarkers and genomic profiles that would potentially predict how patients will respond to various therapies. Unfortunately, as you can well imagine, this population of patients, namely those who do not maintain their CR is too small to draw any conclusions about that. And we don't have biological information regarding tumor characteristics to extrapolate. So unfortunately, although it's a great idea and a great question, we don't have the information that will permit us to re-stratify these individuals based on what we know about them right now.

Got it. And then just switching gears to the platform, kind of Matt's. Can you talk about other chemos? I know there's Vesimune with checkpoints. But can you talk a little bit about other drugs that you're looking to employ within the platform outside of mitomycin C? Or are there limitations with the platform that limit you to certain types of chemos or biologics or whatever is the case?

So generally speaking, we don't think we're limited nor granted that platform. The technology is not going to work with every drug, that's very clear. But we believe that it could work with most drugs. And just as an example, mitomycin, which obviously is the active ingredient in MitoGel and in VesiGel, that's a small molecule. BotuGel, that's BOTOX, that's a large molecule so here's right off the bat an example of a small molecule and a large molecule that can be applied with the gel. So we certainly don't believe there are any inherent limitations. It's not going to work with every drug. We do have some thoughts regarding other chemotherapies. For competitive purposes, we're not disclosing anything at the moment. But there are some thoughts on that front as well.

Got it. And I don't want to leave Gary out of this, so I'm just going to throw one out there. I know you talked about the cash runway, how long you imagine it will last. But can you just talk a little bit about the burn for 2018? And obviously, I assume it's back-end loaded. But any sort of color you can provide there?

Sure. Thanks, Ren, and thanks for not leaving me out, I appreciate that. So cash burn for this year will be significantly higher than it was last year, primarily because of the trial that's ongoing and the activities around that including building up the U.S. operations. So we're expecting the 2018 cash burn to be between $45 million and $50 million this year. That is, as I said, significantly higher than last year. So that's essentially what I'd point you towards.

And next we have Ram Selvaraju with H.C. Wainwright.

This is Mitchell on for Ram. Just wanted to ask how many sites are likely to be involved in the Optima II study and how quickly you expect to complete enrollment?

So the question was how many sites do we expect we'll have in the Phase II study for VesiGel?

Right, and how quickly you expect to complete enrollment?

Let me take the second first. I think it's probably a little premature for us to say how quickly we'll enroll. But to give you some sense of this, we probably will have somewhere between 15 to 20 sites. That's currently our thinking, although that could change. However, remember that in contrast to our current ongoing trial with MitoGel in UTUC, the target disease for the Phase IIb would be bladder cancer, which is a much more common disease. So we would expect that, that would proceed more rapidly, although that's conjecture at this point.

I am showing no further questions at this time. I will now turn the call back to Urogen's CEO, Ron Bentsur, for closing remarks.

Thank you, operator. I want to thank everyone for taking the time to join us on the call today. We look forward to updating you during the exciting year ahead as we continue to execute on our vision, of becoming a leader in the field of uro-oncology and urology. On behalf of the Urogen team, thank you for your support. Operator, you may now disconnect. Thank you.

Thank you, ladies and gentleman. This concludes today's conference. Thank you for participating, and you may now disconnect.